9 ms·

He's 'donating' his money to the non-profit that was created last year. It sounds noble, but I believe one of the other motives is that he will be able to keep

He's 'donating' his money to the non-profit that was created last year. It sounds noble, but I believe one of the other motives is that he will be able to keep his money in the family for generations. He will be able to get around the death tax and pretty much any other taxes that could take away his fortune. Pretty much every billionaire has done this.

deleted 10y ago
[deleted]
sleepychu 10y ago
It's not even a non-profit so that he's able to lobby the government.
- BatFastard 10y ago
  This is just another scam by the rich to not pay taxes, total BS. That this is legal in U.S is total beyond belief. Its worse the the Panamanian shell corporations.
  - harryh 10y ago
    Charitable contributions are tax deductible in the majority of countries not just the US. FWIW.
    - tdeck 10y ago
      IKEA is a good example of this in Europe.
    - sleepychu 10y ago
      AFAICT there won't be any charitable contributions by Zuck the human, possibly by Zuck&Chan the company.
      - harryh 10y ago
        Zuck & Chan the company is a wholly owned LLC which means that from a financial perspective there isn't really any difference.
pilsetnieks 10y ago
> death tax I'm guessing you vote Republican? Trust funds and charitable organizations are a time honored way for the superrich for avoiding the estate tax, regardless of political leanings but "death tax" is a kind of a charged language. Besides, they are still young, they may also actually want to do something positive with the money, not just offload it to protect it from the government. Unless you think he's about to kick the bucket soon?
- themartorana 10y ago
  I vote Bernie but I'm against estate taxes. I'm for capita gains being taxed as normal income and so many other things (I'm an in-theory fan of FairTax.org), but strongly against estate taxes.
  - deleted 10y ago
    [deleted]
  - Gustomaximus 10y ago
    Why are you against estate tax?
    - branchless 10y ago
      Maybe his kids are thick?
    - pilsetnieks 10y ago
      You didn't ask me but still: because it's relatively easy to avoid (via the aforementioned trust funds and charities,) and the cutoff is kind of arbitrary. Improving income and capital gains taxation would be fairer for everyone.
  - deleted 10y ago
    [deleted]
  - thecrow1213 10y ago
    Seriously, why? Doesn't estate taxes only apply to large large large estates, and wouldn't apply to the majority of homeowners in America?
curiousgal 10y ago
Can you elaborate?
lazaroclapp 10y ago
The thing is, his stated goal is to keep 1% of his money in the family for the next generation. Right now that 1% is 357 million. Estate tax is 40%. He has a single child as of now. So, that child will inherit 214 million dollars. She could probably live her entire life of the interest in that money, make her own (smaller) charitable contributions and still give her own single child the same amount (adjusted for inflation and accounting for the estate tax). So I don't believe donating 99% of his money and ensuring the prosperity of his family for generations are mutually exclusive to Zuckerberg. His philanthropy does not conflict with his own self-interest. Also, like Gates, Rockefeller, Carnegie, Stanford, etc, he has a lot of fame and renown to gain from doing good in his own name and during his lifetime. Now, don't get me wrong, income inequality is a real problem and the fact that some world-scale social programs now seem to depend entirely on the wishes of a few men versus popular administration is in many ways troubling (in others, well, Bill Gates has potentially done more against AIDS in the third world than most democratic governments...). But Occam's Razor applies and although I imagine tax incentives pay a part on how and when billionaires donate (that's why they are called incentives...), I don't default to thinking that Zuckerberg is twirling his mustache over this, laughing maniacally and saying "this is how I shall defraud the IRS!". But let's see, in due time, what happens. So far the Gates foundation seems legit, for example, and there goes another mustache twirling villain of the tech world...
- nsajko 10y ago
  Income inequality is nothing compared to the enormous wealth (and thus power) inequality that is present here and it doesn't diminish when Zuckerberg donates his shares to the LLC. Why would he laugh maniacally about getting to keep his money, it's legal, not fraud, and of course he wants the power/influence wealth gives him/his family.
- developer2 10y ago
  >> his stated goal is to keep 1% of his money in the family for the next generation. Right now that 1% is 357 million 1% likely won't be anywhere near 357 million after another 10 years, let alone in 50+ years. Evaluations of wealth based on assets and stocks almost never wind up trading for that amount of cash. You are worth what you can liquidate today, not what market "experts" think your portfolio could be worth in some theoretical perfect scenario.
tosseraccount 10y ago
This is a red herring. Real news is "Facebook plans new non-voting shares to keep Zuckerberg at helm" "http://www.reuters.com/article/us-facebook-results-stock-idUSKCN0XO2RG?mod=related&channelName=technologyNews" http://www.reuters.com/article/us-facebook-results-stock-idU... This smells of a unwanted dilution.
- tedmiston 10y ago
  A 3:1 split but only 1 of your 3 shares post split will have voting rights, assuming I've read this correctly. > Facebook will issue two of the so-called "Class C" shares for each outstanding Class A and Class B share held by shareholders. > So, for example, someone who held a single Class A share at Wednesday's closing price of $108.76 would end up instead with one Class A share and two Class C shares, each of which would be priced at $36.25. > "Since the Class C shares would have the same economic rights as the Class A and Class B shares, we would expect that after the payment of the stock dividend, the share price of the Class A common stock would generally reflect a three for one stock split," Facebook Chief Financial Officer Dave Wehner said on a conference call.
zrail 10y ago
It is not a non-profit. It is explicitly a for-profit private company because there are many things a non-profit is legally prohibited from doing. http://www.forbes.com/sites/kerryadolan/2015/12/04/mark-zuckerberg-explains-why-the-chan-zuckerberg-initiative-isnt-a-charitable-foundation/ http://www.forbes.com/sites/kerryadolan/2015/12/04/mark-zuck...
- tedmiston 10y ago
  > Poon noted that a charitable foundation cannot own more than 10% of a company’s stock. If at some point Zuckerberg chooses to move 10% of Facebook stock into his Chan Zuckerberg Initiative, he is free to do that.
- hkmurakami 10y ago
  One requirement he likely wants to avert is the legal requirement for non profits to give away 5% of their assets every year.
joshAg 10y ago
It's not a 'death' tax. It's an inheritance tax that is paid by the person receiving the money. If he doesn't let relatives inherit enough of his wealth, then none of it gets taxed.
deleted 10y ago
[deleted]
patcon 10y ago
If he himself doesn't believe his company is going to last a generation, then the quickest way to cash out (for himself, his family, and the causes he believes in) without raising alarms is to claim it's for his non-profit, right?

deleted 10y ago

[deleted]

sleepychu 10y ago

It's not even a non-profit so that he's able to lobby the government.

BatFastard 10y ago
This is just another scam by the rich to not pay taxes, total BS. That this is legal in U.S is total beyond belief. Its worse the the Panamanian shell corporations.
- harryh 10y ago
  Charitable contributions are tax deductible in the majority of countries not just the US. FWIW.
  - tdeck 10y ago
    IKEA is a good example of this in Europe.
  - sleepychu 10y ago
    AFAICT there won't be any charitable contributions by Zuck the human, possibly by Zuck&Chan the company.
    - harryh 10y ago
      Zuck & Chan the company is a wholly owned LLC which means that from a financial perspective there isn't really any difference.

pilsetnieks 10y ago

> death tax I'm guessing you vote Republican? Trust funds and charitable organizations are a time honored way for the superrich for avoiding the estate tax, regardless of political leanings but "death tax" is a kind of a charged language. Besides, they are still young, they may also actually want to do something positive with the money, not just offload it to protect it from the government. Unless you think he's about to kick the bucket soon?

themartorana 10y ago
I vote Bernie but I'm against estate taxes. I'm for capita gains being taxed as normal income and so many other things (I'm an in-theory fan of FairTax.org), but strongly against estate taxes.
- deleted 10y ago
  [deleted]
- Gustomaximus 10y ago
  Why are you against estate tax?
  - branchless 10y ago
    Maybe his kids are thick?
  - pilsetnieks 10y ago
    You didn't ask me but still: because it's relatively easy to avoid (via the aforementioned trust funds and charities,) and the cutoff is kind of arbitrary. Improving income and capital gains taxation would be fairer for everyone.
- deleted 10y ago
  [deleted]
- thecrow1213 10y ago
  Seriously, why? Doesn't estate taxes only apply to large large large estates, and wouldn't apply to the majority of homeowners in America?

curiousgal 10y ago

Can you elaborate?

lazaroclapp 10y ago

The thing is, his stated goal is to keep 1% of his money in the family for the next generation. Right now that 1% is 357 million. Estate tax is 40%. He has a single child as of now. So, that child will inherit 214 million dollars. She could probably live her entire life of the interest in that money, make her own (smaller) charitable contributions and still give her own single child the same amount (adjusted for inflation and accounting for the estate tax). So I don't believe donating 99% of his money and ensuring the prosperity of his family for generations are mutually exclusive to Zuckerberg. His philanthropy does not conflict with his own self-interest. Also, like Gates, Rockefeller, Carnegie, Stanford, etc, he has a lot of fame and renown to gain from doing good in his own name and during his lifetime. Now, don't get me wrong, income inequality is a real problem and the fact that some world-scale social programs now seem to depend entirely on the wishes of a few men versus popular administration is in many ways troubling (in others, well, Bill Gates has potentially done more against AIDS in the third world than most democratic governments...). But Occam's Razor applies and although I imagine tax incentives pay a part on how and when billionaires donate (that's why they are called incentives...), I don't default to thinking that Zuckerberg is twirling his mustache over this, laughing maniacally and saying "this is how I shall defraud the IRS!". But let's see, in due time, what happens. So far the Gates foundation seems legit, for example, and there goes another mustache twirling villain of the tech world...

nsajko 10y ago
Income inequality is nothing compared to the enormous wealth (and thus power) inequality that is present here and it doesn't diminish when Zuckerberg donates his shares to the LLC. Why would he laugh maniacally about getting to keep his money, it's legal, not fraud, and of course he wants the power/influence wealth gives him/his family.
developer2 10y ago
>> his stated goal is to keep 1% of his money in the family for the next generation. Right now that 1% is 357 million 1% likely won't be anywhere near 357 million after another 10 years, let alone in 50+ years. Evaluations of wealth based on assets and stocks almost never wind up trading for that amount of cash. You are worth what you can liquidate today, not what market "experts" think your portfolio could be worth in some theoretical perfect scenario.

tosseraccount 10y ago

This is a red herring. Real news is "Facebook plans new non-voting shares to keep Zuckerberg at helm" "http://www.reuters.com/article/us-facebook-results-stock-idUSKCN0XO2RG?mod=related&channelName=technologyNews" http://www.reuters.com/article/us-facebook-results-stock-idU... This smells of a unwanted dilution.

tedmiston 10y ago
A 3:1 split but only 1 of your 3 shares post split will have voting rights, assuming I've read this correctly. > Facebook will issue two of the so-called "Class C" shares for each outstanding Class A and Class B share held by shareholders. > So, for example, someone who held a single Class A share at Wednesday's closing price of $108.76 would end up instead with one Class A share and two Class C shares, each of which would be priced at $36.25. > "Since the Class C shares would have the same economic rights as the Class A and Class B shares, we would expect that after the payment of the stock dividend, the share price of the Class A common stock would generally reflect a three for one stock split," Facebook Chief Financial Officer Dave Wehner said on a conference call.

zrail 10y ago

It is not a non-profit. It is explicitly a for-profit private company because there are many things a non-profit is legally prohibited from doing. http://www.forbes.com/sites/kerryadolan/2015/12/04/mark-zuckerberg-explains-why-the-chan-zuckerberg-initiative-isnt-a-charitable-foundation/ http://www.forbes.com/sites/kerryadolan/2015/12/04/mark-zuck...

tedmiston 10y ago
> Poon noted that a charitable foundation cannot own more than 10% of a company’s stock. If at some point Zuckerberg chooses to move 10% of Facebook stock into his Chan Zuckerberg Initiative, he is free to do that.
hkmurakami 10y ago
One requirement he likely wants to avert is the legal requirement for non profits to give away 5% of their assets every year.

joshAg 10y ago

It's not a 'death' tax. It's an inheritance tax that is paid by the person receiving the money. If he doesn't let relatives inherit enough of his wealth, then none of it gets taxed.

deleted 10y ago

[deleted]

patcon 10y ago

If he himself doesn't believe his company is going to last a generation, then the quickest way to cash out (for himself, his family, and the causes he believes in) without raising alarms is to claim it's for his non-profit, right?